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STERIS' (STE) Earnings & Revenues Surpass Estimates in Q3
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STERIS plc (STE - Free Report) reported third-quarter fiscal 2021 adjusted earnings per share (“EPS”) of $1.73, up 19.3% year over year. The metric beat the Zacks Consensus Estimate by 10.9%.
The adjustment excludes the impact of certain non-recurring charges like COVID-19-led incremental costs, amortization of acquired intangible assets, acquisition and integration-related charges, and amortization of property step up to fair value.
The company’s GAAP EPS was $1.33, up 8.1% year over year.
Revenues in Detail
Revenues of $808.9 million improved 4.5% year over year in the quarter. Further, the metric exceeded the Zacks Consensus Estimate by 1.7%. The year-over-year uptick was led by robust sales in all of the company’s three reporting segments.
Organic revenues at constant currency or CER rose 1% year over year in fiscal third quarter.
Quarter in Detail
The company operates through three segments — Healthcare, Applied Sterilization Technologies and Life Sciences.
Revenues at Healthcare rose 2.4% year over year to $521.7 million (down 1.1% on a CER organic basis). In the quarter under review, service revenues rose by 1% and consumable revenues increased 14%. Meanwhile, capital equipment revenues fell 5%.
Revenues at Applied Sterilization Technologies improved 12.9% to $176.5 million (up 10.2% at CER organic basis). CER organic revenues reflected increased demand from medical device customers on a rebound in procedure volumes during the quarter.
Revenues at the Life Sciences segment rose 1.9% to $115.7 million (flat at CER organic basis) on 7% growth in consumable revenues and 5% rise in service revenues. However, this was offset by a 9% decline in capital equipment revenues.
Margins
Gross profit in the reported quarter was $345.9 million, up 4.1% from the prior-year quarter’s adjusted gross profit (excluding costs and benefits of revenues for restructuring). Gross margin contracted 15 basis points (bps) year over year to 42.8% in the reported quarter.
STERIS witnessed a 5.5% year-over-year uptick in selling, general and administrative expenses to $182.4 million. Research and development expenses, however, dipped 0.3% to $16.4 million. Adjusted operating expenses of $198.8 million rose 4.9% year over year.
Adjusted operating profit totaled $147.1 million, reflecting a 2.9% rise from the prior-year quarter. Meanwhile, adjusted operating margin in fiscal third quarter also contracted 26 bps to 18.2%.
Financial Details
STERIS exited fiscal third quarter with cash and cash equivalents of $252.5 million compared with $312 million at the end of fiscal second quarter.
Cumulative net cash flow from operating activities at the end of fiscal third quarter was $501.8 million compared with $391.3 million a year ago.
The company’s free cash flow at the end of third-quarter fiscal 2021 was $337.7 million compared with $238.1 million in the year-ago period. Capital expenditure of the company at the end of the reported quarter was $164.5 million, up from $153.6 million in the year-ago period.
The company approved a quarterly interim dividend of 40 cents per share to shareholders.
Guidance
STERIS, due to uncertainties tied to the duration and impact of the pandemic on its operations, is not issuing any financial outlook for fiscal 2021 at the moment.
Our Take
STERIS exited third-quarter fiscal 2021 with better-than-expected results. The company witnessed solid revenue growth across all three of its reporting segments despite the coronavirus pandemic. Contributions from the Key Surgical buyout, elevated consumer demand and rebound in procedure volumes, along with strength in segments catering to COVID-19-related products and services, are encouraging. An increase in free cash flow despite increased capital spending instills optimism.
However, contraction in both margins during the quarter is concerning. The company’s decision to not provide any financial guidance for fiscal 2021 is also worrying.
Zacks Rank and Key Picks
STERIS currently carries a Zacks Rank #3 (Hold).
A few other top-ranked stocks in the broader medical space are Abbott Laboratories (ABT - Free Report) , Hologic, Inc. (HOLX - Free Report) and AngioDynamics, Inc. (ANGO - Free Report) .
Abbott reported fourth-quarter 2020 adjusted EPS of $1.45, which surpassed the Zacks Consensus Estimate by 6.6%. Fourth-quarter worldwide sales of $10.7 billion outpaced the consensus mark by 7.9%. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic reported first-quarter fiscal 2021 adjusted EPS of $2.86, beating the Zacks Consensus Estimate by 33.6%. The company currently flaunts a Zacks Rank #1.
AngioDynamics reported second-quarter fiscal 2021 adjusted EPS of a penny against the Zacks Consensus Estimate of a loss per share of 2 cents. Revenues of $72.8 million beat the consensus mark by 8%. The company currently carries a Zacks Rank #2.
These Stocks Are Poised to Soar Past the Pandemic
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Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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STERIS' (STE) Earnings & Revenues Surpass Estimates in Q3
STERIS plc (STE - Free Report) reported third-quarter fiscal 2021 adjusted earnings per share (“EPS”) of $1.73, up 19.3% year over year. The metric beat the Zacks Consensus Estimate by 10.9%.
The adjustment excludes the impact of certain non-recurring charges like COVID-19-led incremental costs, amortization of acquired intangible assets, acquisition and integration-related charges, and amortization of property step up to fair value.
The company’s GAAP EPS was $1.33, up 8.1% year over year.
Revenues in Detail
Revenues of $808.9 million improved 4.5% year over year in the quarter. Further, the metric exceeded the Zacks Consensus Estimate by 1.7%. The year-over-year uptick was led by robust sales in all of the company’s three reporting segments.
Organic revenues at constant currency or CER rose 1% year over year in fiscal third quarter.
Quarter in Detail
The company operates through three segments — Healthcare, Applied Sterilization Technologies and Life Sciences.
Revenues at Healthcare rose 2.4% year over year to $521.7 million (down 1.1% on a CER organic basis). In the quarter under review, service revenues rose by 1% and consumable revenues increased 14%. Meanwhile, capital equipment revenues fell 5%.
STERIS plc Price, Consensus and EPS Surprise
STERIS plc price-consensus-eps-surprise-chart | STERIS plc Quote
Revenues at Applied Sterilization Technologies improved 12.9% to $176.5 million (up 10.2% at CER organic basis). CER organic revenues reflected increased demand from medical device customers on a rebound in procedure volumes during the quarter.
Revenues at the Life Sciences segment rose 1.9% to $115.7 million (flat at CER organic basis) on 7% growth in consumable revenues and 5% rise in service revenues. However, this was offset by a 9% decline in capital equipment revenues.
Margins
Gross profit in the reported quarter was $345.9 million, up 4.1% from the prior-year quarter’s adjusted gross profit (excluding costs and benefits of revenues for restructuring). Gross margin contracted 15 basis points (bps) year over year to 42.8% in the reported quarter.
STERIS witnessed a 5.5% year-over-year uptick in selling, general and administrative expenses to $182.4 million. Research and development expenses, however, dipped 0.3% to $16.4 million. Adjusted operating expenses of $198.8 million rose 4.9% year over year.
Adjusted operating profit totaled $147.1 million, reflecting a 2.9% rise from the prior-year quarter. Meanwhile, adjusted operating margin in fiscal third quarter also contracted 26 bps to 18.2%.
Financial Details
STERIS exited fiscal third quarter with cash and cash equivalents of $252.5 million compared with $312 million at the end of fiscal second quarter.
Cumulative net cash flow from operating activities at the end of fiscal third quarter was $501.8 million compared with $391.3 million a year ago.
The company’s free cash flow at the end of third-quarter fiscal 2021 was $337.7 million compared with $238.1 million in the year-ago period. Capital expenditure of the company at the end of the reported quarter was $164.5 million, up from $153.6 million in the year-ago period.
The company approved a quarterly interim dividend of 40 cents per share to shareholders.
Guidance
STERIS, due to uncertainties tied to the duration and impact of the pandemic on its operations, is not issuing any financial outlook for fiscal 2021 at the moment.
Our Take
STERIS exited third-quarter fiscal 2021 with better-than-expected results. The company witnessed solid revenue growth across all three of its reporting segments despite the coronavirus pandemic. Contributions from the Key Surgical buyout, elevated consumer demand and rebound in procedure volumes, along with strength in segments catering to COVID-19-related products and services, are encouraging. An increase in free cash flow despite increased capital spending instills optimism.
However, contraction in both margins during the quarter is concerning. The company’s decision to not provide any financial guidance for fiscal 2021 is also worrying.
Zacks Rank and Key Picks
STERIS currently carries a Zacks Rank #3 (Hold).
A few other top-ranked stocks in the broader medical space are Abbott Laboratories (ABT - Free Report) , Hologic, Inc. (HOLX - Free Report) and AngioDynamics, Inc. (ANGO - Free Report) .
Abbott reported fourth-quarter 2020 adjusted EPS of $1.45, which surpassed the Zacks Consensus Estimate by 6.6%. Fourth-quarter worldwide sales of $10.7 billion outpaced the consensus mark by 7.9%. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic reported first-quarter fiscal 2021 adjusted EPS of $2.86, beating the Zacks Consensus Estimate by 33.6%. The company currently flaunts a Zacks Rank #1.
AngioDynamics reported second-quarter fiscal 2021 adjusted EPS of a penny against the Zacks Consensus Estimate of a loss per share of 2 cents. Revenues of $72.8 million beat the consensus mark by 8%. The company currently carries a Zacks Rank #2.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>